EDEBT AND EQUITY FINANCING

Deb t financing: when you’re asking for money to a bank or a financial institution (bonds).

Equity financing: you offer something and the y pay it to you. You don’t have to pay money back but you give a portion of your company (stocks).

-Bond less risky and return lower but return of your money plus the interest is guaranteed, emit by companies, governments…, fixed-income securities, issuer (borrower).

Stock more risky and higher return but you assume the risk of the company not being successful.

Equity: -additional paid-in capital: capital that shareholders have contributed to the economy above the nominal or values of the stock.

-Retained earnings: profits that have not been distributed to shareholders.

Accounting equation: assets= liabilities + owners’ equity.

-Balance sheet: shows a company’s financial situation on a specific date, usually at the end of the financial year. It calculates a company’s liabilities, assets and share capital.

Financial statements: income statement (how much was earn or lost in a period), statements of retained earnings (how much money earned were reinvented), balance sheet and statements of cash flows (how much money came in and was paid out).

Let’s a company know: how much money it makes, how much money it spends, what its assets are worth, general financial statements and provides data requested by government agencies.

INTERNATIONAL TRADE

-Merchandise or visible trade: tangible goods (freight and cargo).

-Invisible trade: non- tangible goods.

-Certificate of manufacture and certificate of inspection: documents needed before shipment and also as a warranty for the costumers to prove that the shipment was made in good conditions.

-Bonded warehouse: were goods are stored before the payment or the clearage.

-Balance of trade: difference between imports and exports of goods.

-Balance of payments: difference between a country’s exports and imports of goods and services.

-Trade surplus: more exp. than imp.

-Trade deficit: more imp. than exp.

 1948 GATT = general agreement on traffics and trade. Per recuperar leconomia, no permanent structure, only goods for trade.

1995 WTO = world trade organizations. A permanent structure, goods service and made-related .